Equity Incentive Plans | Note 5. Equity Incentive Plans 2016 Equity Incentive Plan The Company’s 2016 Equity Incentive Plan, or the 2016 Plan, became effective on September 21, 2016. The 2016 Plan provides for the grant of incentive stock options, or ISOs, within the meaning of Section 422 of the Internal Revenue Code, to the Company’s employees or any of the Company’s subsidiaries’ employees, and for the grant of nonstatutory stock options, or NSOs, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to employees, directors and consultants of the Company and the Company’s subsidiaries’ employees and consultants. The total number of shares of Class A common stock reserved for issuance under the 2016 Plan is equal to (1) 3,800,000 initial shares plus (2) a number of shares of Class A common stock equal to the number of shares of Class B common stock subject to awards granted under the 2007 Plan and the 2011 Plan, or our Existing Plans, that, on or after September 22, 2016 expire or otherwise terminate without having been exercised in full, and a number of shares of Class A common stock equal to the number of shares of Class B common stock issued pursuant to awards granted under our Existing Plans that are forfeited to or repurchased by us, provided that the maximum number of shares of Class A common stock that may be added to the 2016 Plan pursuant to (2) is 11,663,388 shares. These available shares will automatically increase each January 1, beginning on January 1, 2017, by the lesser of 5,500,000 shares of Class A common stock, by 5% of the outstanding shares of all classes of the Company’s common stock as of the last day of the Company’s immediately preceding fiscal year, or such other amount as the Company’s board of directors may determine on or before the last day of the Company’s immediately preceding fiscal year. On January 1, 2017, the number of available shares automatically increased by 1,916,887 pursuant to such provision. 2016 Employee Stock Purchase Plan The Company’s Employee Stock Purchase Plan, or 2016 ESPP, became effective on September 21, 2016. A total of 750,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2016 ESPP. These available shares will automatically increase each January 1, beginning on January 1, 2017, by the lesser of 1,600,000 shares of Class A common stock, 1% of the number of shares of all classes of the Company’s common stock outstanding on the immediately preceding fiscal year, or such lesser number of shares as determined by the Company’s board of directors. On January 1, 2017, the number of available shares automatically increased by 383,377 pursuant to such provision. The 2016 ESPP allows eligible employees to purchase shares of the Company’s Class A common stock at a discount of up to 15% through payroll deductions of their eligible compensation, subject to any plan limitations. Except for the initial offering period, the 2016 ESPP provides for separate six-month offering periods beginning November 30 and May 31 of each fiscal year. The initial offering period will run from September 23, 2016 through May 31, 2017. The initial offering period includes the employee enrollment period, which runs from September 23, 2016 to November 10, 2016, at which time employee deductions commenced. On each purchase date, eligible employees will purchase the Company’s Class A common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, which for the initial offering period is the initial price to public in the IPO, and/or (2) the fair market value of the Company’s common stock on the purchase date. During the three months ended March 31, 2017, no shares of Class A common stock were purchased under the 2016 ESPP. Stock Options Stock option activity during the three months ended March 31, 2017 was as follows (in thousands, except per share and contractual life data): Weighted- Weighted- Average Average Remaining Total Options Exercise Price Contractual Intrinsic Outstanding per Share Life (years) Value Outstanding at December 31, 2016 11,203 $ 9.49 Options granted — — Options exercised (262 ) 2.13 Options forfeited or canceled (191 ) 13.48 Outstanding at March 31, 2017 10,750 $ 9.60 6.63 $ 35,240 Vested and expected to vest at March 31, 2017 10,656 $ 9.55 5.26 $ 35,238 Exercisable at March 31, 2017 6,493 $ 6.77 6.56 $ 34,566 As of March 31, 2017, there was a total of $22.5 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock-based compensation arrangements associated with options granted. That cost is expected to be recognized over a weighted-average remaining expected term of 2.61 years. RSUs RSU activity under the 2016 Plan during the three months ended March 31, 2017 was as follows (in thousands, except per share data): Weighted-Average RSUs Grant Date Fair Value Outstanding per Share Non-Vested outstanding at December 31, 2016 628 $ 16.43 Granted 102 12.89 Vested — — Forfeited or canceled (25 ) 16.21 Non-Vested outstanding at March 31, 2017 705 $ 15.92 As of March 31, 2017, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was approximately $10.3 million and weighted-average remaining vesting period was 3.7 years. Stock-based compensation expense recognized in the Company’s statement of comprehensive loss was as follows (in thousands): Three Months Ended March 31, 2017 2016 Cost of revenue Subscription $ 358 $ 141 Professional services 318 154 Operating expenses Research and development 1,041 553 Sales and marketing 999 635 General and administrative 909 422 Total stock-based compensation $ 3,625 $ 1,905 |